IRS methods in need of audit after employees targeted tea party groups

Tuesday, May 14, 2013

FAIRLYORunfairly, one thing that people of nearly every political persuasion share is an unfavorable view of the Internal Revenue Service.

But conservatives have additional reason to dislike the IRS in the wake of revelations Friday that some employees flagged organizations for closer scrutiny if their names had the words “tea party” or “patriots” in their applications for tax-exempt status.

“They didn’t do it out of any political bias,” Lois Lerner, an official with the agency, told reporters.

That’ll be a tough one to sell, Lois.

IRS officials said the practice, which in some cases involved asking groups for their lists of donors — usually a violation of IRS policies — occurred in their Cincinnati office by low-level agency employees.

IRS officials insist no high-level IRS officials knew of the practice. And the White House pointed out that the agency is under the Department of Treasury and has only two political appointees.

Still, the initial reports leave us believing that closer scrutiny — let’s call it an audit — of the situation is warranted.

THE IRS REVIEWS of about 75 conservative groups seem to have been sparked by the increase between 2010 and 2012 in the number of groups seeking tax-exempt status under section 501(c)(4) of the federal tax code, which waives taxes for social and welfare groups. These kinds of groups, unlike other charities, can participate in political activities if their primary activity is social welfare.

The proliferation of such groups follows the 2010 ruling by the U.S. Supreme Court in the Citizens United case — named after the 501(c)(4) group that brought the case — which held that corporations and unions can spend unlimited amounts on elections.

The groups can take anonymous donations and spend them on advertising, though they cannot endorse candidates. Liberals have complained that many conservative political groups are essentially hiding behind the (c)(4) exemption and the IRS needs to look more closely at potential violators.

While we believe the IRS has an obligation to enforce the law around tax-exempt statuses, it can’t be done by targeting groups simply because of their names or political beliefs. Think how liberal groups would howl at the IRS if, under a conservative administration, the agency targeted groups with the words “progressive” or “occupy” in their names.

ONEOFTHE ironies from this kind of bungled scrutiny of 501(c)(4) groups is that it may deter needed reviews of such groups, regardless of political persuasion or purpose. That would be unfortunate.

Much of American life these days has become politicized. The actions of the IRS should be exempt from that realm.